In the last post we looked at the widely used practice of advertising value equivalents. An alternative to AVEs is ‘cost of reach’ which calculates how much it has cost to reach a set number of people (ideally your target audience) with editorial coverage.  It is essentially a measure of cost effectiveness since it can be compared against other forms of marketing.

What is good about this method is that it is standard practice outside of PR.  For example advertising is often reported in terms of CPT or cost per thousand (with online it is often referred to as CPM).  If we can calculate the number of people that have been reached and we know the PR budget then it is relatively straightforward to work out a CPT:

CPT = 1,000 x ( PR Cost / Reach )

Here are some typical CPT figures for different activities:

Which shows just how cost effective PR is as a communications channel.  To put this into perspective it would cost less than £80 to reach everyone who attends a sell-out event at Wembly (80,000 capacity) with PR compared with a whopping £21,600 for direct mail.

Next: Part 4 – Market Research

Previous: Part 2 – Advertising Value Equivalents